Big Fat Finance Blog

Online Subscription Services—Opportunities for Any Business

Alan Radding — Thu, 09 Feb 2012 14:41:20 +0000

The online subscription services segment is hot, and almost any business can capitalize on the kind of recurring revenue stream online subscription services bring. Over the last few years, subscription-based services have become a bit of the rage, declared SF Fashion+Tech.

More than a rage, IDC forecasts the software-as-a-service (SaaS) subscription segment to increase revenues at 6X growth rate. Accenture estimates business process outsourcing (BPO), another subscription service segment, will top $300 billion in 2012. SaaS and BPO are just two segments of the online subscription services industry.

The rapid adoption of the Cloud-based commerce is making online subscription services a target opportunity for any company that wants to add a subscription services component to its revenue strategy. Driving the interest is the concept-to-cash model introduced by OneBill, a young SaaS company. Can you tap into this revenue stream? (more…)

B2B Electronic Invoicing Continues Growth Across the Globe

Karen Kroll — Thu, 09 Feb 2012 11:24:56 +0000

The days of paper invoices continue to decline, as electronic invoicing proliferates. In 2011, the use of e-invoicing jumped by 20 percent, according to an estimate from Basware and Billentis. One reason for the growth is legislation mandating or encouraging its use in several countries, including Finland and Mexico. In the U.S., the Department of the Treasury last year announced that it was “mandating that all Treasury Bureaus implement the Internet Payment Platform (IPP), an electronic invoice processing solution, by the end of fiscal year 2012. Additionally, in fiscal year 2013, Treasury will require that its commercial vendors submit their invoices using IPP.”

The Treasury says that adopting IPP across just that department will save $7 million annually. If IPP were adopted across the Federal government, the savings would hit $450 million annually, the U.S. Treasury estimated. (more…)

U.S. Senate Debates the Value of Tax Extenders

Karen Kroll — Fri, 03 Feb 2012 15:24:25 +0000

Tax extenders — the term given to provisions in the tax code that, if not renewed every year or two, will expire — were the subject of a recent hearing of the U.S. Senate Finance Committee.

More than 130 extenders, from the R&D credit to deductions for state and local taxes, currently clutter the tax code, Senator Max Baucus (D-Mont.), ranking member of the Committee, said at the hearing. The uncertainty they create causes hassles for both homeowners and businesses. “For businesses to succeed, Congress must provide a stable and certain tax code,” Baucus said. (more…)

Facebook IPO Makes Social Commerce Real

Alan Radding — Thu, 02 Feb 2012 16:07:09 +0000

The highly anticipated Facebook IPO will have ramifications for all manner of businesses and how they operate. Just as the Google IPO in 2004 changed the search engine business, catapulting search engines into a major marketing driver and changing how companies spend for advertising and evaluate its effectiveness, Facebook’s IPO will confirm the arrival of social networking as a force in business.

Even before the Facebook IPO companies began capitalizing on social business. wiredFINANCE covered it here. The hoopla around the Facebook IPO will intensify the focus on social commerce no matter how the stock does.

The initial kick came last year with a Booz and Company study here. In that study Booz reports that one-third of companies already had a senior executive who is responsible for social media company-wide. Among companies that consider themselves best-in-class the figure jumped to 41%. What will the mega Facebook IPO do? (more…)

The Facebook IPO Makes Social Commerce Real

Alan Radding — Thu, 02 Feb 2012 14:38:59 +0000

The highly anticipated Facebook IPO will have ramifications for businesses and how they operate. Just as the Google IPO in 2004 changed the search engine business, catapulting search engines into a major marketing driver and changing how companies spend for advertising and evaluate its effectiveness, Facebook’s IPO will confirm the arrival of social networking as a force in business.

Even before the Facebook IPO companies began capitalizing on social business. wiredFINANCE covered it here. Of related interest, David Armano explores Six Social Business Trends here.

But the initial kick came last year with a Booz and Company study here. In that study Booz reports that one-third of companies already had a senior executive who is responsible for social media company-wide. Among companies that consider themselves best-in-class the figure jumped to 41%. What will the mega Facebook IPO do? (more…)

Can Amazon Sell Long-Termism, Too?

Eric Krell — Wed, 01 Feb 2012 18:26:24 +0000

The votes are in, and a long-term approach to business growth has trounced short-termism!

Really. Wall Street Journal readers cast their ballots Wednesday morning after reading this analysis of Amazon’s decision to lower short-term profitability by making investments in warehouses, technology and tablets that the online retailer expects will improve long-term profitability. (more…)

Free Cash Margins Decline Again, and That’s Good

Karen Kroll — Tue, 31 Jan 2012 20:20:25 +0000

The folks at the Financial Analysis Lab at Georgia Tech are out with their latest analysis of corporate cash flow. The finding? For the sixth reporting period in a row, corporate cash flow dropped. While that sounds ominous, the drop actually signals a recovering U.S. economy, they say.

The analysis examined about 2,900 non-financial companies with current market caps of at least $50 million. For the twelve-month period ending September 2011, the free cash margin stood at 4.41 percent, down from 4.63 percent for the year ending June 2011. Its most recent high was in March 2010, when free cash margins hit 7.18 percent. (Free cash margin, according to the report, indicates the percent of revenue left for shareholders in the form of free and discretionary cash flow, and tells how many cents shareholders can take home without reducing the company’s ability to generate more.) (more…)

Statoil Transforms Its Business by Eliminating Budgets

Steve Player — Mon, 30 Jan 2012 16:30:41 +0000

One of the most exciting parts of my work is seeing innovative companies in action. My top five most innovative management teams would have to include energy company Statoil, and their finance organization is certainly one of the key drivers of innovation within the company.

Statoil has not only eliminated budgets but it is in the process of doing away with calendars. (more…)

Some Ways To Get More Bang for Your IT Buck

Robert Kugel — Fri, 27 Jan 2012 20:25:09 +0000

One of the major issues IT executives face is how to charge their departmental costs back to each part of the business according to their usage. It’s a touchy issue that can be the source of end-user disenchantment with the performance and contribution of the IT organization. Ultimately, charge-back friction can hobble IT’s ability to make necessary investments in new capabilities and become the primary cause of misallocated IT spending. The two risks are related: Unless an IT department can calculate the real costs of the services it provides to specific parts of the business and charge for them accordingly, it is almost impossible for line-of-business department managers to assign priorities to the “keep the lights on” part of the budget, so even low-priority maintenance or upgrade efforts can crowd out all but the most pressing needs. The issue of allocating IT department costs spills over to Finance, which typically handles the allocations in budgeting and profit calculations. As a first step toward establishing an effective means of funding the IT function, I believe the finance department must establish better methods of allocating IT costs. Eventually the proper allocation of IT costs also becomes an issue for senior corporate executives as well because it has a direct impact on how effectively a company uses information technology. (more…)

Risk Management’s Missing Dimension(s)

Eric Krell — Fri, 27 Jan 2012 16:44:38 +0000

When practitioners, consultants and academics discuss leading organizational risk management practices, they hone in on people, processes and supporting technology. As major risk management failures in recent years have illustrated, mastering these three dimensions is necessary but not sufficient.

Effective enterprise risk management (ERM) — or any discreet risk management process — hinges on other dimensions as well, including organizational culture, behavior, ethics and change management … all the squishy, human stuff that defies convenient categorization in COSO cubes and other traditional risk management frameworks. (more…)